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Comment by astine | Hacker News Reader

"Gifts in kind aren’t subsidies?"

They can be but that's less common. The key difference is that a subsidy is direct and an active policy.

For example, when people talk about subsidies for renewables, they aren't talking about any externalized costs of manufacture, which do exist, they are talking about direct government gifts and tax breaks deliberately put in place to encourage investment in renewables. When people talk about subsidies given to fossil fuels the same is true, especially when they are being compared to renewables as is the case in this discussion.

Edit: removed word "decision" to clarify my meaning

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Then it's a gift in kind and a subsidy.

When I litter, I get fined, but those companies are not when they litter e.g. carbon all over. When I dump chemicals into nature, I get fined for polluting the environment or even imprisoned outright, those companies do not e.g. when it's in the form of "emissions". Cars in my country get taxed directly or indirectly (through fuel) based in part on emissions, while a lot of commercial vehicles and fuels for these vehikles get a reduced rate or even excluded from taxation. But cars here are taxed far less so than in other European countries. etc.

The governments are clearly aware that pollution and dumping your garbage are things you should not do or at least minimize. They made laws against it, but actively decided to exclude certain business sectors and/or certain types of pollution, or actively decided not to regulate or tax certain types of pollution while regulating/taxing others.

"Cars in my country get taxed directly or indirectly (through fuel) based in part on emissions"

Unless these emmission taxes are calibrated to the cost of climate change then this argument is missing the point. Taxes and subsidies are often instituted in response to negative and positive externalities, but that doesn't change the fact that they are different things. This is important when trying to draw policy comparisons which is our situation here.

You seem to want to argue that subsidizing a business and not taxing them on an externality is somehow morally the same thing, and that's an entirely different discussion, but it doesn't mean that they are factually the same thing. There is a practical difference in terms of how things are measured and how policies are compared across industries and governments and that difference matters.

>Unless these emmission taxes are calibrated to the cost of climate change then this argument is missing the point.

The stated policy goal in part is to reduce emissions to met climate targets to fight climate change, so yes.

>You seem to want to argue that subsidizing a business and not taxing them on an externality is somehow morally the same thing

It is.

>but it doesn't mean that they are factually the same thing.

First of all, the meaning of words and political concepts are never factual.

But I'd still argue that at a high level they are the same, and both are subsidies. In both cases the government refuses money it would otherwise collect from different parties, thereby gifting those entities value you can put a price tag on.

Those decisions are active decisions NOT to do something (while doing something about the same thing or very similar things when it comes to other parts of the population), at least at this point.

The only distinction I'd make is between direct subsidies (the government forks over money) and indirect/implicit subsidies (the government decides not to make certain entities pay for certain things for which other entities have to pay the government).

">but it doesn't mean that they are factually the same thing.

First of all, the meaning of words and political concepts are never factual."

You're still missing the point. The point is that there is a distinction between a subsidy and an externality and that distinction is important. It's important for measurement reasons (The exact monetary amount a government spends on something is easier to measure than the indirect cost of a policy,) and for simple communication reasons. It makes no sense to talk about instituting a tax to cover a subsidy. You institute a tax to cover an externality. It also matters because there are ways of dealing with externalities other than taxes and subsidies and reducing the language makes this more confusing. It's especially confusing when the distinction is made in one discussion (about renewables) but not in the other (about fossil fuels.)

There is a term for using an unexpected definition for a word that already has a widely used definition during a discussion, that is a 'stipulative definition'. It's dishonest to do so without being clear upfront or in response to a discussion where the original definition is in use. This results in equivocation. Whether or not a subsidy is morally equivalent to an externality is a moot point if you're willing toss about with the language. My work involves financial reporting and if my employer asked for one set of numbers and I gave him another that I argued were 'morally equivalent' would pretty clearly be in the wrong, even if the point I was making about moral equivalence was correct.

No, you're splitting hairs.

There are direct and indirect subsidies. Indirect subsidies include externalities: external costs paid by everyone else (that the government should be incentivizing reductions in by requiring the folks causing them to pay)

Semantic digressions aside, they're earning while everyone else pays costs resultant from their operations (and from our apparent inability to allocate with e.g. long term security, health, and prosperity as primary objectives for the public sphere)

Handing money to polluters helps polluters, and failing to disincentivize externalities also helps polluters, but it's OK to call one thing a subsidy and the other thing poor governance.

"Subsidy" carries a connotation of purposeful action to help something. Subsidizing a bad thing is worse than merely allowing it to happen or looking the other way. It seems like you want to re-label things in "B" by the label for "A" to make it sound worse.

>"Subsidy" carries a connotation of purposeful action to help something.

Purpouseful action implies awareness and intention.

Externality implies not yet recognized.

Having 2 words for similar concepts does not mean they are different concepts. "heavy" and "massive" are two different words but they convey essentially the same thing.

I would agree that unrecognized externalities are not subsidies, say CO2 pollution before it was recognized, but then again since they were literally not recognized as externalities (yet).

But the very moment CO2 pollution is recognized, the previously unrecognized externality is to be instantly viewed as a subsidy.

History repeats itself, the first time as a tragedy, from then on as a farce.

For that logic to work we would need e.g. a carbon tax, such that there would be a straightforward monetary value associated with any exceptions that might be granted.

Why do subsidies have to be an active policy decision?

You’re right, when people talk about fossil fuel subsidies, that’s thinking of government gifts and tax breaks. My point is that this is a deeply inadequate way to think about it. If you only look at these, and compare fossil fuels to renewables, you’ll come away thinking that fossil fuels are far cheaper than they actually are.

"If you only look at these, and compare fossil fuels to renewables, you’ll come away thinking that fossil fuels are far cheaper than they actually are."

In the case of this discussion, you're looking at it backwards. The subject of fossil fuel subsidies was brought up in comparison to subsidies for renewables which in this case were already defined as specific government programs. If it weren't for that, I wouldn't be being such a stickler. However given that we are comparing renewables to fossil fuels we need to be sure that we are measuring the same thing and to include externalities when measuring fossil fuels and not when measuring renewables is to be not measuring the same thing. (I actually got confused when I first saw the IMF link so I know my concern isn't hypothetical.)

Yes, I get that the case can be made that cost of using fossil fuels is more that the sum of direct gifts by the government to fossil fuel companies (fucking duh!) but that can be expressed without implying that governments gave $5.2T in tax dollars directly to fossil fuel companies in 2017. Where confusion is possible, it's best to make distinctions and clarify what is meant.

"subsidies" includes both direct and indirect subsidies.

We can measure direct subsidies by measuring real and effective tax rates.

We can measure indirect subsidies like healthcare costs paid by Medicare with subjective valuations of human life and rough estimates of the value of a person's health and contribution to growth in GDP, and future economic security.

But who has the time for this when we're busy paying to help folks who require disaster relief services from the government and NGOs (neither of which are preventing further escalations in costs)

Problem is that if the word "subsidies" is used exclusively to mean a specific and narrow concept around cash transfers when talking about renewables, but then you use the term to include a much broader set of scenarios when talking about fossil fuels, while directly comparing the derived numbers, then you're misusing the language in order to deceive, regardless of all else. You're communicating that the numbers represent the same calculations for both forms of energy, when you know that they actually don't.

Define the terms however you like, as long as you are careful to not to induce people to believe someone that is untrue.

It’s true that you have to measure the same thing, but you also have to measure a useful thing.

If you compare fossil fuels and renewables based on the number of letters in their names, that’s the same thing for both, but it’s not useful.

Comparing explicit monetary subsidies is like that. If you want to include the implicit ones for renewables as well, you definitely should. But giving up and only comparing direct monetary subsidies gives you a woefully incomplete and misleading picture.

You're arguing that we should be comparing the total cost of the fossil fuel and renewable energy industries. If the discussion is mainly about the direction society should take with regard to energy, then I would agree with you. But there are still contexts in which it is useful to talk strictly about subsidies. For example, when discussing how much an industry depends on direct government action, which is the context of this whole discussion we are having right now. (ie Solar and Wind Power So Cheap They’re Outgrowing Subsidies, in which the my definition of subsidy is the one being used, I'm pretty sure.) Yes, there are time where it's more important to discuss the big picture, but there are also times it's worthwhile to discuss the details and language should retain the detail to do both.

There's another reason this is important and it is with regard to the big picture. A lot of people already know what subsidy means and understand it to mean direct government gifts. When you use a different definition of a commonly understood word, what you are doing is defining it stipulatively. If you don't clarify that you are using a stipulative definition ahead of time, then you are committing a fallacy of equivocation. It doesn't matter if you think that your stipulative definition makes more sense or is more useful, people have to be using words the same way in order to communicate. I'd rather not give climate denialists any more fuel than is absolutely necessary and confusing equivocations are unnecessary. Talking about subsidies when you mean subsidy and talking about costs when you mean cost helps avoid them.

Not requiring a company pay, in some form, the cost of their externality costs is an active policy decision. It's perhaps not a frequent point of policy discussion, but it's still a decision - particularly when we know the cost of climate crisis mitigation is so high.

"Not requiring a company pay, in some form, the cost of their externality costs is an active policy decision."

No, it's a passive policy decision by definition.

Why? What definition?

The refusal to collect costs those polluters put on everybody is as active an decision as the decision not to collect taxes (tax breaks) that you'd otherwise use to keep the country running for everybody.

It's an active policy decision to have the state stay passive and do nothing.

It's an active policy decision in any country where a proposed "polluter pays" type law has been voted down.

Choosing not to make a choice is a choice itself - additionally this portion of policy has been heavily debated societally - it's not like we're talking about something so obscure that actually opening up a discussion on it will require a heavy expenditure of labour to properly research the topic.

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